AHIP: Hospital Inpatient Pricing Up Sharply

Prices for inpatient hospital care rose 8.2% between 2008 and 2010, with wide price and cost growth fluctuations recorded across states and localities over the timeframe, according to a study by America's Health Insurance Plans.

Even after adjusting for more numerous or complex procedures performed per admission, prices climbed sharply for most types of hospitalizations. Unadjusted hospital prices per admission rose from $13,016 in 2008 to $15,236 in 2010, an average annual growth rate of 8.2%, said the study,Trends in Inpatient Hospital Prices, 2008 to 2010, which appeared in this week in The American Journal of Managed Care.

"Despite the keen interest in US healthcare costs, there is surprisingly little detailed public information available on one of its key components: transaction prices paid by commercial insurers for inpatient hospital care," the study said.

The 15.2% price growth for spinal fusions topped the list of 10 common admissions categories, while bronchitis and asthma came in second with 10.3% price growth, the study said.

New York led all states with a 10.5% price increase over the three years, followed by Texas at 9.3% and Tennessee at 8.8%. Within states the price growth could fluctuate considerably. For example, the price growth in the Buffalo-Niagara Falls region was 14.4% for the period, the study said.

J. Lauer (3/20/2013 at 10:49 AM)
Good data here, but analysis of the reasons for the increase in prices is weak. A bunch of possibilities are thrown against the wall like spaghetti, but none stick. Seems to me prices are rising because the payer incentives and competition in healthcare are lacking. It was inferred, if not explicitly stated that consolidation has decreased competition even further. Basically, the mess is getting worse.

Aaron (3/20/2013 at 10:23 AM)
Oh Please! While I'm no big fan of insurance companies, their business model inherently must adjust premium prices to cover the expected payments they will pay to their members. No one wants their insurance company to lose money and stop paying claims... right? The real driver that is increasing health care costs is the consolidation of physicians under hospital control. Hospital owned physicians, testing and procedures are reimbursed at 2 to 5 times the rate of the same services at independent outpatient centers. As the hospitals are controlling more and more physicians and demanding all of their testing and procedures remain within their organization, the cost of care has skyrocketed. Insurance companies simply adapt. When insurance companies have tried to fight back and reject the hospital systems annual price increase demands - they are "threatened" with the risk of losing the hospital system and all the physicians they control from that insurance company's plan. Solution: Reimburse hospitals adequately for services they do well that NEED to be done in a hospital i.e. inpatient ICU, ER, etc. But hospitals should no longer be allowed to charge 2-5X more for services that are better served by independent (patient comes first, not hospital finances) outpatient centers. If we continue to allow hospitals to gouge the health care consumer (indirectly through insurance companies) for these services, soon there won't be any cost effective alternatives as the independent physician clinics will be a thing of the past and insurance companies will lose the last tiny bit of leverage they have left.